MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
Governance Reporting Governance reporting pertains to a company’s internal structures and decision-making pro - cesses. Companies must disclose informa - tion regarding the composition of their Board, leadership practices and measures to protect shareholder rights. This includes establishing internal controls, risk management frameworks, anti-corruption measures and whistle-blower policies. The MCCG provides specific govern - ance requirements, including the need for inde - pendent directors and the formation of Board committees to uphold sound corporate govern - ance practices and ensure integrity in corporate decisions. Regulatory Frameworks and Reporting Standards In Malaysia, companies are expected to adhere to both local and international ESG reporting standards. The Malaysian Financial Report - ing Standards (MFRS) and the MCCG provide guidelines for these disclosures. Bursa Malaysia mandates that public listed companies include ESG information as part of their annual reports, ensuring transparency and accessibility for stakeholders. Additionally, many companies voluntarily align their ESG strategies with global initiatives such as the United Nations Sustain - able Development Goals (SDGs), thereby dem - onstrating a broader commitment to global sus - tainability objectives. Accountability and Transparency Transparency is a critical component of ESG reporting. Companies must provide accurate, complete and verifiable information on their ESG performance, including both achievements and areas for improvement. As investor interest in ESG data grows, many companies are now opt - ing for third-party assurance or audits to vali - date their disclosures and enhance credibility.
This practice fosters trust among investors, stakeholders and the general public, reinforcing the company’s commitment to responsible and sustainable business practices. 3. Management of the Company 3.1 Bodies or Functions Involved in Governance and Management In Malaysia, corporate governance and manage - ment are structured around several key bodies, each with distinct roles and responsibilities to ensure accountability, transparency and long- term corporate success. These functions are governed primarily by CA 2016, the MCCG and, for public listed companies, the Listing Require - ments. The principal bodies and functions involved in corporate governance and management are as follows: • the Board; • the senior management team (SMT); and • Board committees, namely the audit and risk management committee (ARMC), nominating committee (NC) and remuneration committee (RC) (collectively, the “Board Committee” ). 3.2 Decisions Made by Particular Bodies In Malaysia, corporate decision-making is struc - tured to ensure accountability, transparency and strategic alignment, with specific responsibili - ties assigned to key governance bodies. While decision-making is collaborative, certain types of decisions are exclusively reserved for particu - lar bodies to safeguard the company’s integrity and ensure sound corporate governance.
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